Friday, August 1, 2025

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Tesla Shares Plummet After Automaker Allegedly Halts Expansion Plans in China

Tesla stock suffered a slump on Tuesday, after it was revealed the EV maker halted plans to purchase additional land in Shanghai.

According to Reuters which cited sources familiar with the matter, Tesla abstained from bidding on a piece of land that would expand its nearby Shanghai factory and turn into into a global exportation hub. Previously, the automaker was allegedly planning to increase the capacity of its current production lines in order to bolster exports of its Chinese-made Model 3 to additional markets, including the US.

However, Tesla pointed to escalating trade tensions between the US and China as the reasoning behind the halted plans. With a 25% tariff on Chinese electric car imports, coupled with existing levies brought into law under former US President Donald Trump, the EV maker now plans to reduce the share of China output in its global production.

At the same time though, it is difficult not to point out that there have been trade tensions between the US and China over the past several years regardless. Could it be possible that Tesla is putting a stop to the expansion of its factory not due to rising tensions between China and the US, but of a growing rift between China and Tesla?

Tesla’s image in Chinese media has been falling off the deep end for some time now, especially following numerous allegations of quality control issues and brake failures. In fact, back in April, state-run Global Times reported that the automaker’s Chinese sales are headed for a sharp decline come the second quarter of 2021.

Despite this, it appears that Elon Musk does not seem bothered that his stock is plunging due to growing problems with China. Instead, the Tesla CEO focused on more productive things, such as taking to twitter Tuesday morning to ask whether or not Tesla should begin accepting Dogecoin.


Information for this briefing was found via Reuters and the Global Times. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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